The global workforce: Challenge or asset?

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IBM was one of the first companies to encourage employee blogs and other forms of social networking.

Story highlights

Today's corporations are operating in a world of global workforces

Businesses need to have a global mindset to thrive

Some businesses are changing corporate structures in response

Others are still tripping over the basics

It's like monopoly on a global scale, with people, factories, offices, and ideas, criss-crossing the world to get the job done in time and on budget.

Today's corporations are living in a brave new world with globalization, technology, and the hunt for scarce talent pushing them into new territories and redefining the way they work, think and communicate.

But managing a global workforce is no easy task, and not everyone will get to the finish line. So what does it take to win?

"You must have a global mindset," says Flemming Poulfeldt, professor of management at the Copenhagen Business School. "You have to be open to new ways of thinking, and you have to create an environment, both at home and abroad, that is welcoming and supportive to global workers."

Add to that keywords like strategic talent management, mobility, and cultural agility, which experts say are all necessary components in this brave new world. With the World Economic Forum warning we are entering an "era of unparalleled talent scarcity," companies not only need to be able to find, attract and keep talent, but they need to be mobile enough to set up shop where the best expertise and cost can be found.

"There are clusters of knowledge around the world that we try to tap into," says Lisbet Thyge Frandsen, group senior vice president of people & strategy with Grundfos, one of the world's leading pump manufacturers with 134 companies in nearly 60 countries. "As an example, we've opened a financial shared services center in Budapest because the knowledge base for that is strong there. And, we have a water technology center in Fresno, USA, because the area is key for industry research and development, as well as for networking and business opportunities. It's all about being where the knowledge is."

This kind of approach means companies are shifting from a structure of one central headquarter with smaller divisions around the world. Instead, they are moving to one where key competencies and divisions are established where the necessary knowledge and talent is. It is also the kind of global workforce that requires more local knowledge, better cultural understanding, a significant technical infrastructure, and the ability to build effective global teams that are physically apart.

"Some companies are still tripping over the basic differences in countries which affect the employment situation such as, employment laws, talent availability, differences in educational systems, and unionization," says Paula Caligiuri, professor in the HR management dept. at Rutgers University, and author of the book Managing the Global Workforce. "Understanding and effectively managing cultural differences is critical, but often underestimated by those at the senior level. And doing this well could be a make or break for companies."

As corporate playing fields shifts from regions to the world, there is a growing understanding that overseeing global workforce can be an asset -- rather than a challenge.

"What we've found is that the more diversity we have, the better solutions we get," says Frandsen of Grundfos, which runs talent assessment programs where globally mixed teams work together on simulated problems and exercises. The aim is for workers to gain understanding but also to build upon each others strengths and skills. "For example, where Asians are generally more reserved and westerners more dominant, teams learn to work within that reality to bring out the best in everyone."

Companies are turning to social media, among other technologies, as global networks grow.

IBM, for example -- which has more than 400,000 employees in 170 countries -- was one of the first companies to encourage employee blogs and other forms of social networking.

It uses social media forums as a driver to help bridge cultural differences and social gaps, with an eye to creating virtual societies within its staff. "Technology is the new watercooler," says Randy MacDonald, IBM's Senior Vice President of Human Resources.

MacDonald's sentiment is mirrored by Frandsen. "What we've learned is that we cannot ignore the social network within a global team. So we need to create a common identity inside these networks - a virtual breakroom if you will - through virtual communities and social media."

As companies and workers begin to chart their way through this new territory, road blocks remain. But amidst all these innovation, says Caliguri, there are a few things that will never change. "The basic human challenges - from time zones to building trust - those will remain."